TXU Bonds Climb After Asking Creditors to Extend Loan Maturity

Dec. 26 (Bloomberg) -- Bonds of Energy Future Holdings
Corp.’s unregulated electricity unit rose after the power
producer contending with $37.4 billion in obligations said it
was seeking to extend maturities on $645 million of debt.

Texas Competitive Electric Holdings Co.’s $1.8 billion of
10.25 percent unsecured bonds due November 2015 increased 4
cents on the dollar to 30 cents at 11:58 a.m. in New York,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. Energy Future asked
lenders to extend until 2016 the portion of Texas Competitive’s
revolving loan that matures in 2013, according to a Dec. 21
regulatory filing.

Energy Future, formerly known as TXU Corp. and taken
private by KKR & Co., TPG Capital and Goldman Sachs Capital
Partners for about $43 billion five years ago in the largest
leveraged buyout, is working to improve the finances of a
business that Moody’s Investors Service said may face a
“material restructuring” in the next 12 months.

Texas Competitive also borrowed about $769 million under
its revolving credit facility, according to the filing, making
its total borrowings under the pact $2.1 billion.

The proposal signals owners such as KKR “are actively
seeking to prolong a restructuring at Texas Competitive, which
the market had widely speculated would occur in the fall of
2013,” Andy DeVries, a New York-based analyst at CreditSights
Inc., wrote today in a report. “This supports the recent price
rise in” unsecured Texas Competitive debt.

One undisclosed lender holding $425 million of the
financing already agreed to the maturity extension, Dallas-based
Energy Future said in the filing. Texas Competitive will add
about $340 million of term loans to compensate lenders if all
the revolving credit commitments due in 2013 are extended.

The 2015 notes traded as low as 18.5 cents on Nov. 29,
Trace data show. Money under a revolving credit line can be
borrowed again once it’s repaid.

Texas Competitive has $32.2 billion in debt, $700 million
of which comes due in 2013, and about $2.7 billion in interest
payments next year, according to the filing.